Whoa - sorry for your mess. What is your budget? And where do you live? Climate is everything with a deck. Since this is such a LARGE area - and I see a step off - never good when entertaining - kids older folks or yourself - how about covering the entire portion nearest the house (patio) , including the step off with a ground level deck ? The entire thing to the sides of the house? TREX has come out with great new products which actually can now be stained or comes in more colors? No replacement ever required!

Secondly - I have also seen GREAT new products - where you can purchase half-stone -for recovering steps and areas such as yours. You can also purchase manufactured stone as well. Since you indicate this is uneven is there anyway to hire someone to sand down the rough spots - with an industrial sander? If not can you fill in the uneven spots with concrete - then cover with the Half-brick? You can rent these at Home Depot - industrial equipment places.

I would indicate the step-off from the decked area - with one step & some installed edged lighting when transitioning from the deck area -to the old shed area? I also see a large drop off from the largest portion of the concrete to the yard - personally - I would get some large flower boxes and plant low level sustainable shubbery - with some type of solar powered underlighting - not only to add appeal but to serve a warning of this step off - into the yard. After this is attended to - again - another transitional step INTO the yard itself - lit with installed solar lighting (the kind you install from the back of the step - to light the step below. You could also place large beautiful flower pots at the sides of the step off place to the recovered place?
You couldt hen take one of those huge style flower urns and make a recycling water feature - they also come solar powered these days or place it closer to the house with outdoor installed electrical outlets.

IF you like this idea - when all is said and done - I would edge the entire deck and reclained patio area with landscaped beds. Something eaisly maintainable - like shubbery. Flowers can always be added with hanging seasional baskets - etc. I always go to the nurseries which provide indegenious plant and landscape materials - just because I know I will not end up planting stuff that has no chance of survial. It does better and is more disease tolerant.

I like your pergola idea, I like the fire-pit concept - so many lovely things you could do - but what would serve YOU, YOUR family & friends best? This is what should be the deciding factor. I would definitely cover the pergola with a shade screen - yes - they are even making these now - found a whole bunch on the internet. Also - if $$$ are an issue - hold off on the Pergola - for the interim - I have seen SAIL shades - they come in all shapes and sizes - colors - this could work for your BBQ station or simply a hmmock area. You could also place the recycling water feature large urn next to the house - where you could hear it trickle and splash when inside - very wonderful. We just did this outside of our TV/Family room - wonderful for those days when windows are open.

And before I placed anything anywhere - I would definitely watch to see - which places get the most sun/shade througout the day, duration, etc. Place plantings accordingly and your pit/pergola/ etc. Seating, BBQ station.

I just noticed one more thing - that step off between where the patio is and where the shed area was - I would include this in my ground-level deck, Actually, I would take the ground deck to the end of the house house on both sides - and use some large in ground stepping stones to where you would step up onto the deck facing the left side of your yard? Making a little pathway from the front of the house and driveway - into the back room areas. Make sense? This is where you could have lovely low flower beds, herbs, all kinds of books out there for these too. Shade beds?

We are currently in the process of removing a DECK from the back of our Vic. Cottage and replacing with an actual victorian porch area - which goes with the original house - 1896! So, I have been seriously looking at these types of ideas for a couple of years - Hopefully in your town - you have a store like a water garden specialist? where they sell pumps, lighting, etc. I also troll the flea markets, and yard sales - looking for old garden statues - etc., which are so much nicer than the composite (and expensive for what they are) stuff you find in places like Lowes or Home Depot, discount garden centers - depending on where you live - recycled and reclaimed cedar is nice - because it does not usually deterioriate.

But definitely - ground level deck for the entire patio area to cover it all and then some - just for safeties sake alone - and a restoned - cover for the shed area.

Please let us know - what you choose - whatever it is, I know it will be beautiful.

IF you wanted to go all fancy (????) Some semi-circular canvas awnings to cover each west facing window, or just over the patio doors - would surely add the finishing touch to your patio area. They come in all colors - I like the wide striped ones - Red, Green, Black, Blue - even yellow -

Show us? :-)